The ADP/Moody's National Employment Report for
June indicated that private nonfarm payrolls increased 158,000 (2.0% y/y)
following a 230,000 May gain, revised from 253,000. A 189,000 increase had been
expected in the Action Economics Forecast Survey. During the last ten years,
there has been a 96% correlation between the change in the ADP figure and the
change in nonfarm private sector payrolls as measured by the Bureau of Labor
Statistics.

The Automatic Data Processing Research Institute survey is
based on ADP's business payroll transaction system covering 411,000 companies
and nearly 24 million employees. The data are processed by Moody's Analytics
Inc., then calibrated and aligned with the BLS establishment survey data. The
ADP data cover private sector employment only.

Small-sized business payrolls increased 17,000 (1.4% y/y)
following a 58,000 rise. The weak increase compared to a 79,000 average earlier
in the year. Medium-sized payrolls increased 91,000 (2.3% y/y), down from the
100,000 average from January to May. Large-sized payrolls gained a steady 50,000
(2.6% y/y).

Employment in the goods-producing sector remained unchanged
(1.7% y/y) for the second month in the last three, down from the 88,000 Q1
average increase. Construction sector payrolls declined 2,000 (+3.3% y/y) versus
a 33,000 average monthly gain earlier in the year. Jobs in the factory sector
improved 6,000 (0.8% y/y), but the Q2 average monthly increase slowed
significantly from 31,000 during Q1.

Private service sector payrolls rose 158,000 (2.0% y/y),
below the growth earlier in the year. Professional & business services
payrolls rose an improved 69,000 (3.5% y/y). The number of trade, transportation
and utilities jobs increased a strengthened 30,000 (1.3% y/y) for the second
straight month. Education & health services employment rose a lessened
28,000. The number of leisure & hospitality jobs rose 11,000, down by
two-thirds from the increases earlier in the year. Financial activities jobs
improved 10,000 (1.9% y/y) and remained nearly the slowest increase of the last
four years. Employment in the information sector held steady (1.0% y/y),
following three months of decline.

The ADP National Employment Report data are maintained in
Haver's USECON database; historical figures date back to April 2001 for
the total and industry breakdown, and back to January 2005 for the business size
breakout. The expectation figure is available in Haver's AS1REPNA database.